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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Dollar General Corp., economic profit calculation

US$ in thousands

12 months ended:	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019	Feb 2, 2018
Net operating profit after taxes (NOPAT)¹	3,664,406)	3,112,907)	3,105,494)	2,145,885)	1,981,150)	1,623,118)
Cost of capital²	6.76%	7.02%	6.92%	6.91%	6.74%	6.26%
Invested capital³	24,763,719)	21,499,995)	20,896,699)	19,125,860)	18,107,408)	17,430,340)

Economic profit⁴	1,991,111)	1,603,865)	1,658,828)	824,655)	761,249)	531,420)

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 3,664,406 – 6.76% × 24,763,719 = 1,991,111

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Dollar General Corp. economic profit decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Dollar General Corp., NOPAT calculation

US$ in thousands

12 months ended:	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019	Feb 2, 2018
Net income	2,415,989)	2,399,232)	2,655,050)	1,712,555)	1,589,472)	1,538,960)
Deferred income tax expense (benefit)¹	236,032)	114,359)	34,994)	55,407)	52,333)	(137,729)
Increase (decrease) in LIFO reserve²	517,300)	180,400)	5,200)	7,000)	25,200)	(2,200)
Increase (decrease) in equity equivalents³	753,332)	294,759)	40,194)	62,407)	77,533)	(139,929)
Interest expense	211,273)	157,526)	150,385)	100,574)	99,871)	97,036)
Interest expense, operating lease liability⁴	415,416)	372,748)	368,919)	368,948)	297,781)	240,954)
Adjusted interest expense	626,689)	530,274)	519,304)	469,522)	397,652)	337,990)
Tax benefit of interest expense⁵	(131,605)	(111,358)	(109,054)	(98,600)	(83,507)	(113,903)
Adjusted interest expense, after taxes⁶	495,085)	418,916)	410,250)	370,923)	314,145)	224,087)
Net operating profit after taxes (NOPAT)	3,664,406)	3,112,907)	3,105,494)	2,145,885)	1,981,150)	1,623,118)

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in LIFO reserve. See details »

³ Addition of increase (decrease) in equity equivalents to net income.

⁴ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 10,651,700 × 3.90% = 415,416

⁵ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 626,689 × 21.00% = 131,605

⁶ Addition of after taxes interest expense to net income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Dollar General Corp. NOPAT increased from 2021 to 2022 and from 2022 to 2023.

Dollar General Corp., cash operating taxes calculation

US$ in thousands

12 months ended:	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019	Feb 2, 2018
Provision for income taxes	700,625)	663,917)	749,330)	489,175)	425,944)	368,320)
Less: Deferred income tax expense (benefit)	236,032)	114,359)	34,994)	55,407)	52,333)	(137,729)
Add: Tax savings from interest expense	131,605)	111,358)	109,054)	98,600)	83,507)	113,903)
Cash operating taxes	596,198)	660,916)	823,390)	532,368)	457,118)	619,952)

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Dollar General Corp. cash operating taxes decreased from 2021 to 2022 and from 2022 to 2023.

Dollar General Corp., invested capital calculation (financing approach)

US$ in thousands

	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019	Feb 2, 2018
Current portion of long-term obligations	—)	—)	—)	555)	1,950)	401,345)
Long-term obligations, excluding current portion	7,009,399)	4,172,068)	4,130,975)	2,911,438)	2,862,740)	2,604,613)
Operating lease liability¹	10,651,700)	10,074,268)	9,459,467)	8,784,488)	8,226,006)	7,772,715)
Total reported debt & leases	17,661,099)	14,246,336)	13,590,442)	11,696,481)	11,090,696)	10,778,673)
Shareholders’ equity	5,541,772)	6,261,986)	6,661,238)	6,702,500)	6,417,393)	6,125,774)
Net deferred tax (assets) liabilities²	1,060,906)	825,254)	710,549)	675,227)	609,687)	515,702)
Excess of current cost over LIFO cost³	813,600)	296,300)	115,900)	110,700)	103,700)	78,500)
Equity equivalents⁴	1,874,506)	1,121,554)	826,449)	785,927)	713,387)	594,202)
Accumulated other comprehensive (income) loss, net of tax⁵	(43)	1,192)	2,163)	3,135)	3,207)	4,181)
Adjusted shareholders’ equity	7,416,235)	7,384,732)	7,489,850)	7,491,562)	7,133,987)	6,724,157)
Construction in progress⁶	(313,615)	(131,073)	(183,593)	(62,183)	(117,275)	(72,490)
Invested capital	24,763,719)	21,499,995)	20,896,699)	19,125,860)	18,107,408)	17,430,340)

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of LIFO reserve. See details »

⁴ Addition of equity equivalents to shareholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of construction in progress.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Dollar General Corp. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Dollar General Corp., cost of capital calculations

Feb 3, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	45,094,716)	45,094,716)	÷	62,672,927)	=	0.72	0.72	×	8.15%	=	5.86%
Long-term obligations, including current portion³	6,926,511)	6,926,511)	÷	62,672,927)	=	0.11	0.11	×	4.25% × (1 – 21.00%)	=	0.37%
Operating lease liability⁴	10,651,700)	10,651,700)	÷	62,672,927)	=	0.17	0.17	×	3.90% × (1 – 21.00%)	=	0.52%
Total:	62,672,927)					1.00					6.76%

Based on: 10-K (reporting date: 2023-02-03).

¹ US$ in thousands

² Equity. See details »

³ Long-term obligations, including current portion. See details »

⁴ Operating lease liability. See details »

Jan 28, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	52,555,043)	52,555,043)	÷	67,072,297)	=	0.78	0.78	×	8.15%	=	6.38%
Long-term obligations, including current portion³	4,442,986)	4,442,986)	÷	67,072,297)	=	0.07	0.07	×	3.74% × (1 – 21.00%)	=	0.20%
Operating lease liability⁴	10,074,268)	10,074,268)	÷	67,072,297)	=	0.15	0.15	×	3.70% × (1 – 21.00%)	=	0.44%
Total:	67,072,297)					1.00					7.02%

Based on: 10-K (reporting date: 2022-01-28).

¹ US$ in thousands

² Equity. See details »

³ Long-term obligations, including current portion. See details »

⁴ Operating lease liability. See details »

Jan 29, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	44,929,041)	44,929,041)	÷	59,094,767)	=	0.76	0.76	×	8.15%	=	6.19%
Long-term obligations, including current portion³	4,706,259)	4,706,259)	÷	59,094,767)	=	0.08	0.08	×	3.74% × (1 – 21.00%)	=	0.24%
Operating lease liability⁴	9,459,467)	9,459,467)	÷	59,094,767)	=	0.16	0.16	×	3.90% × (1 – 21.00%)	=	0.49%
Total:	59,094,767)					1.00					6.92%

Based on: 10-K (reporting date: 2021-01-29).

¹ US$ in thousands

² Equity. See details »

³ Long-term obligations, including current portion. See details »

⁴ Operating lease liability. See details »

Jan 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	36,027,608)	36,027,608)	÷	47,954,115)	=	0.75	0.75	×	8.15%	=	6.12%
Long-term obligations, including current portion³	3,142,019)	3,142,019)	÷	47,954,115)	=	0.07	0.07	×	3.46% × (1 – 21.00%)	=	0.18%
Operating lease liability⁴	8,784,488)	8,784,488)	÷	47,954,115)	=	0.18	0.18	×	4.20% × (1 – 21.00%)	=	0.61%
Total:	47,954,115)					1.00					6.91%

Based on: 10-K (reporting date: 2020-01-31).

¹ US$ in thousands

² Equity. See details »

³ Long-term obligations, including current portion. See details »

⁴ Operating lease liability. See details »

Feb 1, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	30,485,674)	30,485,674)	÷	41,575,960)	=	0.73	0.73	×	8.15%	=	5.97%
Long-term obligations, including current portion³	2,864,280)	2,864,280)	÷	41,575,960)	=	0.07	0.07	×	3.62% × (1 – 21.00%)	=	0.20%
Operating lease liability⁴	8,226,006)	8,226,006)	÷	41,575,960)	=	0.20	0.20	×	3.62% × (1 – 21.00%)	=	0.57%
Total:	41,575,960)					1.00					6.74%

Based on: 10-K (reporting date: 2019-02-01).

¹ US$ in thousands

² Equity. See details »

³ Long-term obligations, including current portion. See details »

⁴ Operating lease liability. See details »

Feb 2, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	24,202,850)	24,202,850)	÷	35,040,916)	=	0.69	0.69	×	8.15%	=	5.63%
Long-term obligations, including current portion³	3,065,351)	3,065,351)	÷	35,040,916)	=	0.09	0.09	×	3.10% × (1 – 33.70%)	=	0.18%
Operating lease liability⁴	7,772,715)	7,772,715)	÷	35,040,916)	=	0.22	0.22	×	3.10% × (1 – 33.70%)	=	0.46%
Total:	35,040,916)					1.00					6.26%

Based on: 10-K (reporting date: 2018-02-02).

¹ US$ in thousands

² Equity. See details »

³ Long-term obligations, including current portion. See details »

⁴ Operating lease liability. See details »

Dollar General Corp., economic spread ratio calculation, comparison to benchmarks

	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019	Feb 2, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	1,991,111)	1,603,865)	1,658,828)	824,655)	761,249)	531,420)
Invested capital²	24,763,719)	21,499,995)	20,896,699)	19,125,860)	18,107,408)	17,430,340)
Performance Ratio
Economic spread ratio³	8.04%	7.46%	7.94%	4.31%	4.20%	3.05%
Benchmarks
Economic Spread Ratio, Competitors⁴
Costco Wholesale Corp.	4.96%	9.01%	7.38%	3.58%	5.48%	5.18%
Target Corp.	0.53%	13.48%	3.95%	2.48%	2.66%	—
Walmart Inc.	1.33%	1.86%	3.24%	3.27%	-2.00%	—

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 1,991,111 ÷ 24,763,719 = 8.04%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Dollar General Corp. economic spread ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Dollar General Corp., economic profit margin calculation, comparison to benchmarks

	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020	Feb 1, 2019	Feb 2, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	1,991,111)	1,603,865)	1,658,828)	824,655)	761,249)	531,420)
Net sales	37,844,863)	34,220,449)	33,746,839)	27,753,973)	25,625,043)	23,470,967)
Performance Ratio
Economic profit margin²	5.26%	4.69%	4.92%	2.97%	2.97%	2.26%
Benchmarks
Economic Profit Margin, Competitors³
Costco Wholesale Corp.	0.73%	1.28%	1.10%	0.64%	0.88%	0.78%
Target Corp.	0.15%	3.89%	1.30%	0.88%	0.93%	—
Walmart Inc.	0.33%	0.51%	0.96%	1.05%	-0.62%	—

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × 1,991,111 ÷ 37,844,863 = 5.26%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Dollar General Corp. economic profit margin deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Dollar General Corp. (NYSE:DG)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin